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Why Rural Towns Get Left Behind, and What We Can (Should) Do About It


Permission to republish. (April 1, 2017). HatchLab Baker. LinkedIn Pulse.

If it doesn't make someone a lot of money, it's just not worth doing.

That's the general response to just about everything, from helping a company raise money, to offering legal services, to brokering business buy-outs when someone needs to retire. There are many important middlemen who grease the wheels of an economy, helping provide unique expertise. When a place is small, and business isn't always brisk, this expertise is often missing. These services are as essential in rural towns as urban ones, so what (and who) picks up the slack when a service would make all the difference to success but simply doesn't exist?

YES! Magazine just put out its April 2017 issue, and it contains an interesting article about a service headquartered in Kansas, called RedTire. It helps ensure that businesses in need of a new owner don't go out of business, by assisting with finding and settling in a new owner. Their tagline is great: "Retiring and aspiring business owners can apply today."

In Concordia, Kansas, population 5,000, they made sure the local pharmacy stayed open, a huge boon to a tiny town that has relied on that business for the last 40 years.

"RedTire has nothing to do with tires; instead, the name is short for the phrase "Redefine Your Retirement." The staff do everything from appraising the business to vetting the buyer, and even offer counsel after the deal is done."

So, how do they do it when other for-profit businesses can't or won't? As always in rural towns, it takes a village, or, a creative partnership where people wear a variety of hats.

Turns out the University of Kansas hosts (and essentially underwrites) the RedTire program. The program's success is built around the involvement of business students who staff the service. They get paid as they learn in a real world setting, while making a real difference in their community. Brilliant!

The kicker? The program does not charge for its services. This has caused folks interested in replication to turn away. I say, phooey on them. They don't get it.

I run a nonprofit program called Hatch Oregon that helps entrepreneurs raise money using a new "crowd-investing" law in Oregon. It's a new model of raising capital from your community, and has the power to transform the inequitable financial system. Turns out that many of our clients are in rural communities, outside urban Portland. Frankly, most of Oregon is rural. And guess what, they haven't got much money.

The USDA provided us with a grant a few years back, to offer our program in rural Joseph (5,000) and Baker City (10,000) in rural NE Oregon. We did train the regional economic development district staff (funded by state, federal, and foundation dollars), but no one else in town was beating down our doors to learn how to provide the same service as a business. When servicing small business and rural communities, there's just not much money in it. So what are rural town leaders supposed to do?

For the most part, they do without. Right now (early April), I happen to be working in a small town in Scotland (pop. barely 3,000). Yesterday, I picked up the local paper in the cafe/craft/bakery shop. The leading cover article was about the Royal Bank of Scotland pulling the plug on over 20 banks in small towns all over Scotland. This coastal area of Fife alone will lose six of their branches on high streets up and down the coast. Town leaders and citizens are "angry and dismayed". While the reason sound plausible (400% increase in online and mobile banking) there's an entire generation of folks who don't trust the internet with their money, and local tourism depends on a local bank. What will these folks do? Who cares?

Decision-making based on how much money an entity can make is an increasingly dangerous one. Whether it's fiduciary duty to shareholders (which has been called into question recently) or just a regional firm with their heads in the numbers and their hearts in the freezer, it's a slippery slope to reduce every decision to a quantitative data point. It also implies the decision-makers won't feel the effects. These days, it's harder and harder to avoid the fallout. What we do to others we do to ourselves, in very important ways. Taken together, this profit-over-people mindset of making decisions, especially effecting people in small places, feels like a social and economic catastrophe waiting to happen.

I believe we've got to do what Kansas did, and reach across silos to create mutually beneficial partnerships with all kinds of unusual suspects. Universities, community colleges, nonprofits, hospitals, libraries, corporations, tourist organizations, and government agencies should begin to look at themselves as community catalysts in new ways.

Perhaps every town needs a "Community Collaboration Coordinator" who is paid by a bit from each entity (now there's an idea). This person is given the time and authority to identify, troubleshoot, and suggest solutions with the aim of creative collaborations and mutual benefit. Rather like a regional solution "ombudsman".

I rather fancy this idea, I think it's "brilliant" (as they say here). What else should we be doing in rural communities?

Amy Pearl is the Executive Director of Hatch Innovation and runs a co-working space and accelerator in both Portland and Baker City, Oregon. Hatch Innovation also helped craft Oregon's crowd investing law which helps increase access to capital for small businesses. HatchLab Baker is part of a new Oregon initiative called Rural Opportunity Network, or ROI.



Membership in NREDA Provides Key Networking Opportunities

NREDA's approximately 350 individual members are a virtual Who's Who of electric, telephone cooperatives, local economic development organizations, key 'sister' associations, consultants and rural government related organizations. Members take pride in their willingness to share expertise and information with peers. Take advantage of mentoring opportunities through the ED411 program; search the directory for areas of expertise, attend NREDA events and meet the folks who do what you do, join a committee and get to know others in the rural economic development field.

NREDA Membership Breakout



NREDA's Grassroots Advocacy Issues Paper


The Grassroots Advocacy Committee is responsible for monitoring federal legislation that may have an impact on economic development in rural America. This monitoring will include developing and maintaining relationships with the legislative staffs of affiliated organizations such as NTCA, NRTC, NRECA, NADO and CFC.

The Committee keeps the Board apprised of legislation and has developed an issues paper that defines key areas of recognition or support for rural development. Download the full 2017-18 NREDA Grassroots Advocacy Issues Paper to learn more.

The committee co-chairs are Shawn Rennecker and Nikki Pfannenstiel with committee members including: RaSarah Browder, Brad Captain, Lee Chapman, Rand Fisher, Tony Floyd, Lisa Franklin, John Greene, Clare Gustin, Diana Hersch, Christy Hopkins, Paul Mantz, Loren Medley, Cy Murray, JD Wallace.



Bylaws Changes and Member Incentive Program


NREDA Members: In February of 2015, the NREDA board initiated a pilot program to increase NREDA's membership which targets regional economic development groups. This goal of this "limited affiliate" membership is to give regional economic development groups exposure to NREDA and the ability to participate in our events. The board expects that once people see the value of NREDA, we will be able to convert them to full members of our organization.
The pilot program has been successful and membership has grown as a result. Enough so, the board proposes to make the category of Limited Affiliate Member a permanent part of the NREDA membership structure. To do that, NREDA bylaws must be changed to reflect this new membership category. We would also offer that as part of the overall bylaw review process, the board is also proposing a few minor edits to reflect actual board practices and procedures.
Attached for your review are the proposed bylaws. They are presented in a red-line format to make review easier. We have also included an outline of the various membership programs as background information.
The proposed bylaws were presented and approved at the NREDA Annual Meeting for adoption by the membership. Presented by NREDA Bylaws Committee: Dan Boysel, Bruce Nuzum & Nikki Pfannenstiel



IEDC Publication Available: A New Standard: Achieving Data Excellence in Economic Development


Plain and simple, data drives decision-making in business and beyond. How well are you incorporating data into your daily business functions, and how easy is it for data users such as site selectors to get quality, accurate, and timeline data from you?

Aside from traditional federal data sources, such as the Bureau of Economic Analysis, Census Bureau, and the Bureau of Labor Statistics, do you know the many other ways to access critical sets of data? A New Standard: Achieving Data Excellence in Economic Development, a recently published EDRP Report, is now available to IEDC member. The comprehensive report explains how economic developers can use new sources of information and analytic tools to present the quality data that corporate decision-makers expect, while addressing gaps in data that can hinder business attraction efforts.

Economic Development Research Partners Program is an exclusive membership level of IEDC, which supports practice-oriented research. The publications developed under EDRP's guidance and sponsorship are designed to increase the knowledge base of the economic development profession and help practitioners navigate through today's rapidly changing economy. Non-IEDC members may purchase the publications. Click here to learn more.




NREDA's 2016-2017 Grassroots Advocacy Issues Paper


The Grassroots Advocacy Committee is responsible for monitoring federal legislation that may have an impact on economic development in rural America. The Committee will keep the Board apprised of this legislation. This monitoring will include developing and maintaining relationships with the legislative staffs of affiliated organizations such as NTCA, NRTC, NRECA, NADO and CFC.

The Committee keeps the Board apprised of legislation and has developed an issues paper that defines key areas o recognition or support for rural development. Download the full 2016-17 NREDA Grassroots Advocacy Issues Paper to learn more.

Additionally, several years ago, the committee put together a user-friendly, how-to guide entitled, How to be a Legislative Advocate, which takes what can be an intimidating process and breakes it down for you step by step. We hope you find it a useful tool.

The committee chair is Shawn Rennecker and committee members include: Clare Gustin, Tony Floyd, RaSarah Browder, Lisa Franklin, Cy Murray, Loren Medley, Russell Laird, Diana Hersch, Lee Chapman, Ian Kaiser, Christy Hopkins, Paul Mantz, and Rand Fisher.





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